GBP/USD: Can ease towards 1.3375 – UOB Group
Pound Sterling (GBP) could ease to 1.3375 against US Dollar (USD); any further decline is unlikely to reach the major support at 1.3335. In the longer run, downward momentum is beginning to build; it may take a while before 1.3335 comes into view, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Downward momentum is beginning to build
24-HOUR VIEW: "GBP extended its sharp drop from two days ago, reaching a low of 1.3401 in the NY session, before closing marginally lower at 1.3422 (-0.04%). While downward momentum has not increased significantly, there is a chance for GBP to ease further to 1.3375. A dip below this level is not ruled out, but based on the current momentum, any further decline is unlikely to reach the major support at 1.3335. Resistance is at 1.3440; a breach of 1.3470 would indicate that the current mild downward pressure has eased."
1-3 WEEKS VIEW: "In our latest narrative from last Friday (13 Jun, spot at 1.3600), we highlighted that 'upward momentum is increasing, but we prefer to wait for a decisive close above 1.3640 before revising our GBP outlook to positive.' We added, 'the likelihood of GBP closing above 1.3640 will remain intact as long as 1.3515 is not breached.' GBP fell sharply on Tuesday and broke below 1.3515. Although the momentum buildup indicates that GBP could weaken further, given that downward momentum is only beginning to build, it may take a while before 1.3335 comes into view. On the upside, should GBP break above 1.3520, it would indicate that GBP is more likely to trade in a range instead of heading lower toward 1.3335."